"The last couple of years have been horrendous," said Dungey, the president of Auburn Leathercrafters, a collar and leash maker in Auburn, N.Y. Her leather costs rose 83 percent in two years to $8.25 a foot. "It's been hard to keep up," forcing Auburn to boost prices by as much as 10 percent, the most in at least three decades, she said.

Output dropping

While ranchers raise cattle mostly for meat, a single hide can produce enough leather for 11 cowboy boots, 20 footballs or one bucket seat. The herd began the year as the smallest since 1951, after record feed costs and drought over the past decade. Output is dropping just as Americans boost spending on leather goods and luggage to the most in at least 14 years.

The cost of U.S. beef has surged to a record this year, and leather isn't far behind. Heavy native steer hides rose 17 percent in the 12 months through Nov. 8 to $122.30, the highest since the government began tracking the benchmark in 1998. Global demand is growing with improved sales of cars and luxury items, especially in China. Boot-maker Wolverine World Wide Inc., which bought $300 million of leather last year, says prices will remain near all-time highs.

Smaller herds

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The domestic herd fell to 87.7 million head on Jan. 1, down 1.8 percent from a year earlier, after the smallest calf crop since 1949, U.S. Department of Agriculture data show. The number of cattle slaughtered this year will drop 6.5 percent, said Jim Robb, an agricultural economist at the Livestock Marketing Information Center in Denver.

About half of all leather produced ends up in footwear, 30 percent is used in automobile interiors and furniture, and the rest goes into apparel and accessories, the industry-funded Leather Industries of America estimates.

U.S. consumers will spend $21.58 billion on leather goods and luggage in 2014, the highest since at least 2000, according to Los Angeles-based industry researcher IBISWorld.

With leather accounting for as much as 60 percent of the cost to make a bag, shoe or boot, buyers will start switching to other materials including canvas or imitation leather, said Ken Maxfield, president of The Maxfield Report, a hide-market publication.